Ehrlich donors largely in-state

88% of $3.7 million raised in last 2 months from Md.

Businessmen donate heavily

Townsend list has national names, fellow Democrats

Election 2002

October 26, 2002|By Michael Dresser | Michael Dresser,SUN STAFF

Republican Robert L. Ehrlich Jr. has relied overwhelmingly on in-state donors as he passed Democrat Kathleen Kennedy Townsend in the fund-raising race and amassed a record $8.6 million in his campaign for governor.

Ehrlich's main campaign committee drew 88 percent of the $3.7 million it raised over the past two months from Maryland addresses. Townsend relied more heavily on a national network of supporters, taking in 42 percent of the $1 million she raised in that time from out-of-state donors. She has raised a total of $7.9 million.

The two major-party candidates for governor disclosed the source of their contributions yesterday in the final campaign finance reports required before the Nov. 5 election. Polls show the candidates in a virtual dead heat.

Ehrlich's reports showed that he benefited from a huge outpouring of financial support from Maryland businessmen - some of whom went to great lengths to give far more than the $4,000 an individual can contribute to a candidate under Maryland law.

Two Maryland developers gave Ehrlich at least $40,000 each by contributing the $4,000 legal limit under the names of different business entities.

Rockville developer Francis O. Day III contributed the $4,000 maximum to Ehrlich at least 10 times through various corporations, partnerships and other entities he controls. So did Laurel developer Kingdon Gould Jr.

Other Ehrlich contributors also appeared to take advantage of a provision of state law that allows individuals to contribute the maximum under multiple businesses they control - as long as the ownership structure is slightly different. There was no obvious indication that Townsend donors were doing the same.

Paul Schurick, Ehrlich's political director, defended the use of that provision, adding that the campaign's lawyers carefully scrutinized every donation.

"We are extremely sensitive to the law. We interpret it conservatively and literally," Schurick said. "We play by the rules the Democratic legislature established."

Peter Hamm, a spokesman for Townsend, said her campaign is not attempting to exploit that provision - described by campaign finance reform proponents as a loophole.

"We've tried to be very careful to live up to the spirit as well as the letter of the appropriate law," Hamm said. "We've bent over backwards to ensure we don't do anything inappropriate."

Gould said it is "possibly right" that several businesses he is associated with have given contributions to Ehrlich, though he emphasized that his association with them doesn't mean all the donations are coming from him.

"Hopefully my contributions conform to the law, whatever the heck that is," he said. Day could not be reached for comment.

Townsend's campaign was aggressive in tapping into the generosity of her fellow Democratic officeholders - some of them former rivals. The campaigns of Montgomery County Executive Douglas M. Duncan and Mayor Martin O'Malley both gave her campaign the maximum amount a political committee can give in a governor's race - $6,000 to her and another $6,000 to her running mate, retired Adm. Charles R. Larson.

As usual, Townsend's contribution list was studded with the names of celebrities, relatives and Kennedy family associates.

Townsend also continued to benefit from the strong support of political action committees for organized labor and trial lawyers.

Yesterday's reports are the last required under Maryland law before Election Day. The campaigns are now in a period where they can raise money freely from special interests whose open support might have hurt them at the polls.

James Browning, executive director of Common Cause/Maryland, said he expects to see an influx of money from the gambling industry to back Ehrlich's candidacy. Ehrlich supports allowing slot machines at Maryland racetracks, while Townsend opposes them.

"This is the best chance they're going to have to help the campaign without getting Ehrlich `in trouble'" by having the contributions publicized before the election, Browning said.

Federal law makes it more difficult to inject money directly into the state's two highly competitive congressional races - in the 2nd and 8th districts - without disclosure before Nov. 5. After filing their last full report this week, candidates are required to report contributions of $1,000 or more to the Federal Elections Commission within 48 hours of receiving them.

Browning said the 48-hour rule should be extended to state races. "The sums for the governor's race are just staggering this year, and that's all the more reason to have timely information," he said.

There is, however, a loophole in federal law that can let big contributors help a favored candidate by contributing "soft money" to the state party, which can then spend it to help the candidate. The parties can receive unlimited amounts of soft money this year with no reporting until after the election.

Larry Noble, executive director of the Washington-based Center for Responsive Politics, said his group is expecting "a flood" of soft money. "We think it's going to exceed the amount of soft money in 2000," he said.

Soft money will be curbed by the McCain-Feingold campaign finance reform law, but it doesn't take effect until after this year's election.